Wednesday, January 21, 2009

Today we honor James E. Casey (1888-1983) for his creation of the United Parcel Service. In 1907, Casey borrowed $100 from a friend to start a messenger service with a fleet of 2 bikes. Today UPS is a global company worth about $50 billion (and lots of trucks and planes).

Casey entrepreneurial spirit meant that he drove his company to constantly innovate. UPS is known for being one of the first companies to offer profit sharing for employees. Casey constantly searched for ways to make his company better. One pivotal decision was to be a common carrier. In 1922 UPS started to become the company we recognize today. With common carrier rights, it began to offer services like Cash on Delivery, multiple attempts and return of undeliverable packages. Then, in 1924 the conveyor belt sorting system made its debut at UPS.

Perhaps what I like best about Casey is his ability to overcome his failures. One example of this a failed attempt at air package service. Initially UPS offered air package service in 1929, but the Great Depression and lack of demand quickly ended the service. However, they reopened the option in 1953.

Today we honor James E. Casey for taking his private property and creating great wealth. I think Casey sums up the spirit of Capitalism (whether he meant to or not) with the following quote:

"One measure of your success will be the degree to which you build up others who work with you. While building up others, you will build up yourself."

The market demands that we please others. That's how you make money in capitalism. I think Casey understood that as a supplier of a service, he had to please his customers. Also, he understood that as a demander of labor he had to please his employees.

I think that last little clause "you will build up yourself" shows that he gets it.

Capitalism has neither goals nor intentions for it is an economic system, not a person. I think it's reasonable to suppose that many market participants gain personal satisfaction in knowing that exchanges benefit others as well as themselves. As Ann points out, this is usually an active realization because sellers must not only please potential customers, they have to be more appealing than the competition. Of course, goodwill isn't necessary. Also the existence of surplus confounds popular understanding of the benefits of exchange, but the principle remains.